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In a significant move, the U.S. Department of Justice (DOJ) has chosen Forensic Risk Alliance (FRA) to monitor compliance efforts at Binance Holdings Ltd., sidelining Sullivan & Cromwell.
This decision stems from Sullivan & Cromwell’s involvement in the FTX bankruptcy case, marking a notable shift in oversight dynamics within the cryptocurrency market.
FRA Steps Up
Forensic Risk Alliance (FRA) emerges as the preferred choice over the Wall Street titan Sullivan & Cromwell, signaling a strategic shift by the DOJ. The selection of FRA underscores the department’s vigilance, reflecting concerns over Sullivan & Cromwell’s past entanglement in the FTX scandal, which sent shockwaves across America.
Expertise at Play
Renowned for its proficiency in corruption and fraud investigations, Forensic Risk Alliance assumes the responsibility to ensure Binance’s strict compliance with the terms outlined in its November plea deal, including a substantial $4.3 billion fine. Additionally, the former CEO of Binance, Changpeng Zhao, is set to serve a brief prison sentence as part of the agreement, following his resignation.
FRA’s mandate involves thorough scrutiny of Binance’s internal records and personnel, with direct reporting mechanisms established with the government. The DOJ’s decision is rooted in FRA’s track record, particularly its adept handling of high-stakes international compliance cases, such as its collaboration with Geneva-based Gunvor SA.
Setbacks for Sullivan & Cromwell
Sullivan & Cromwell’s bid for the Binance monitorship faltered due to its involvement in the FTX bankruptcy proceedings. The firm’s mishandling of the FTX bankruptcy, highlighted by Bloomberg, raised doubts about its ability to meet the stringent requirements of overseeing Binance’s compliance.
It’s Time for a Second Chance!
Despite hurdles, Sullivan & Cromwell finds potential redemption in being considered by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) for a separate monitorship. This endeavor would focus on identifying and reporting suspicious activities previously overlooked by Binance, offering the firm an opportunity for rehabilitation in regulatory oversight.
Also Check Out: U.S. State Department Investigates After Binance Executive Detained in Nigeria
Will FRA uncover any hidden secrets at Binance? Stay tuned…